If you bet that Apple was going to turn the square, occasionally wrist-strapped iPod nano into a MOTOACTV-like watch that would provide a glanceable window into iPhone apps, you lost. Clearly, Apple could have gone that route. It teased in the last generation with an expanding selection of watch faces and used this generation to add Bluetooth and enable a thinner design via the new Lightning connector. Nevertheless, Apple decided to forgo the embryonic smartwatch market. Indeed, it returned to the larger, longer iPod nano school of yore, but with the single-button design of its iOS mobile devices complementing a multitouch interface.

The watch faces may be gone, but the new iPod nano regains the ability to play video while retaining photo display and Nike+ integration. It has become the equivalent of the lineup's feature phone, albeit with a better user interface. Examined in context, the new clip-free iPod nano looks more at home as a midrange option between the tiny iPod shuffle and the now larger iPod touch.

Indeed, at $ 150, the new iPod nano might have been a tougher sell had the significantly updated and slimmed down seventh-generation iPod touch stayed at $ 199. However, for those who want the state of Apple's art, there is now a wide pricing swath between the two multitouch-enabled iPods, with the new iPod touch commanding $ 299, twice the price of the nano (with the 64 GB version priced at $ 399).

Among iPods then, this leaves Apple with the still unique and capable fourth-generation iPod touch at $ 199 point, once deemed by the company as a key price point worth pursuing and perhaps even holding back features for. But while the new iPod touch's price puts it in the running against $ 300 holiday gift competitors like the Kindle Fire HD 8.9" tablet and the Nintendo Wii U, it will be the first time that the iPod touch has cost more than a subsidized iPhone on major U.S. carriers. While the new iPod touch continues its tradition of being thinner than its contemporary iPhone cousin and has a bigger display and better camera than the fourth-generation model, it is bested in many other respects by the iPhone 5, which of course has much higher hardwa re costs than are reflected in the subsidized price.

Apple does not seem to be too concerned by the new economic disparity facing the new iPod touch. In fact, this will be the first time that Apple has offered the iPod touch in six hues. That's not so unusual for a mature product line, but it has been something that Apple has tended to confine to the lower-end product and a move that indicates confidence in healthy sales volumes.

The iPod touch has long been the iPhone for those couldn't or didn't want to use the iPhone on their cellular networks. With the iPhone 5 now taking advantage of the latest network technology on three major U.S. carriers (and the fourth seeking to crash the party), the relationship between the two products has shifted, with the iPod touch becoming more about who the users are rather than what they want to spend. The new nano and touch may leave a wide price gap between them, but they now even more clearly target optimized media experie nces -- one focused on the iPod's legacy in music and the other on its future of games and other apps.

Ross Rubin (@rossrubin) is principal analyst at Reticle Research, an advisory firm focused on consumer technology. Views expressed in Switched On are his own.